BYLAWS OF BETHESDA ENERGY COOPERATIVE, INCORPORATED
ARTICLE I: PURPOSES
Bethesda Energy Cooperative, Incorporated (the “Cooperative”) is organized under the Maryland Consumer Cooperative Act and shall operate on a cooperative basis for the mutual benefit of its members, subscribers, and patrons. The Cooperative is organized to provide goods and services for the primary and mutual benefit of the membership. Membership in the Cooperative is available on a voluntary basis and is open to all persons who can make use of its services and are willing to accept the responsibilities of membership. The Cooperative is a nonstock corporation.
ARTICLE II: DEFINITIONS
A. “Member” means any person 18 years or older or any incorporated or unincorporated entity, political subdivision, agency of Federal, state or local government, or any entity which operates on a nonprofit or a cooperative basis, and which meets the requirements of the membership as set forth in these bylaws of the cooperative, and in the rules and regulations, if any, established by the board of directors, and has paid all required membership fees and contributions as determined by the board of directors.
B. “Membership capital” means a member’s capital contribution to the Cooperative to secure the benefits of membership in the Cooperative.
C. “Net savings” means the Cooperative’s total income minus the cost of operation, including reserves.
D. “Person” means a natural person or any incorporated or unincorporated entity.
E. “Savings return” means any payment or allocation made by the Cooperative out of net savings which is computed on the basis of the patron’s business with the Cooperative and refunded in accordance with Section 5-5A-22 of the Maryland Consumer Cooperative Act.
F. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that (1) may be retained, retrieved, and reviewed by a recipient of the communication and (2) may be reproduced directly in paper form by a recipient through an automated process.
G. “Mail’ means to deposit in the United States mails postage prepaid.
H. “Patronage” shall be defined as the volume in dollars of business conducted by a member with any member business.
ARTICLE III: MEMBERS
A. Classification of Members
The Cooperative shall have one (1) class of members.
B. Membership Qualifications A Person may become a member of the Cooperative by:
- Being a resident of Maryland;
- Contributing the required Membership Capital and paying any additional membership fees as set by the board from time to time;
- Receiving a copy of the Cooperative’s bylaws and a receipt for the Membership Capital contribution; and
- Being able to make use of the Cooperative’s services and being willing to accept the responsibilities of membership.
C. Evidence of Membership Interest
Membership interests may be evidenced by certificates of membership or notification of credit to a member’s capital or ownership account.
D. Member Resignation
A member shall have the right to resign as a member of the Cooperative by filing with the secretary of the Cooperative a written notice of resignation. The resignation shall become effective immediately without any action on the part of the Cooperative. Resignation shall not relieve the resigning member from any obligation for charges incurred, dues, assessments, or fees, and this section shall not diminish any right of the Cooperative to enforce any such obligation or obtain damages for its breach. If a member desires to withdraw from the Cooperative or dispose of any or all of the member’s interest in the Cooperative, the Cooperative shall have the option to purchase that interest by paying the book value of any or all of the interest offered. If the Cooperative fails, within sixty (60) days of the original offer, to purchase all or any part of the interest offered, the member may sell the un-purchased interest to a purchaser who is eligible for membership in the Cooperative.
E. Removal of Members
A member’s failure to comply with the articles of incorporation or bylaws of the Cooperative after receiving notice as described below shall result in the termination of the member’s membership. Notice required under this section may be given by any method reasonably calculated to provide actual notice. Any notice given by mail must be given by first-class or registered mail sent to the last address of the member shown on the Cooperative’s records. A member whose membership is terminated shall be liable for any charges incurred, dues, assessments, or fees incurred before termination arising from contract or otherwise. The Cooperative may direct a member whose termination is being considered to refrain from conducting business as a member until the termination decision is made. The Cooperative may also direct a member whose termination is being considered to stay away from the Cooperative’s places of business except as necessary to exercise her or his rights under law.
ARTICLE IV: MEMBER MEETINGS
A. Member Voting
The voting power of the members shall be equal. Whenever members are disqualified from voting on any matter, they shall not be counted for the determination of a quorum or the required vote to approve an action. The vote of a majority of the members present at a duly called meeting at which a quorum is present is the act of the membership. There shall be no voting by proxy. There shall be no cumulative voting.
B. Annual Meetings
The Cooperative shall hold at least an annual meeting of its members to elect directors and to transact any other business within its powers. The annual meeting shall be held each year on the first day of August at the principal officeor any other place as determined by the board of directors. If the day fixed for the annual meeting falls on a legal holiday, the meeting shall be held at the same time and place on the following business day.
C. Special Meetings
The board of directors may call a special meeting at any time. Ten percent of the members may request a special meeting at any time by filing a petition which states the specific business to be brought before the meeting, and the board of directors shall then call the meeting.
D. Notice
Notice of each membership meeting shall be mailed or electronically transmitted to each member at least fifteen (15) but not more than ninety (90) days before the meeting, and, if a special meeting is called, the notice shall state the purpose of the meeting.
E. Quorum
A quorum is present at a membership meeting if five (5) percent of the members are present in person or present by mail ballot.
F. Action Without a Meeting
Any action which may be taken at any regular or special meeting of members may be taken without a meeting if the Cooperative distributes a written ballot to every member entitled to vote on the matter. That ballot shall set forth the proposed action, provide an opportunity to specify approval or disapproval of any proposal, and provide a reasonable time within which to return the ballot to the Cooperative. Approval by written ballot pursuant to this section shall be valid only when the number of votes cast by ballot within the time period specified equals or exceeds the quorum required to be present at a meeting authorizing the action, and the number of approvals equals or exceeds the number of votes that would be required to approve at a meeting at which the total number of votes cast was the same as the number of votes cast by ballot. The solicitation must specify the time by which the ballot must be received in order to be counted.
G. Record Date
The board may fix, in advance, a date as the record date for the purpose of determining the members entitled to notice of any meeting of members. Such record date shall not be more than sixty (60) or less than ten (10) days before the date of the meeting. If no record date is fixed, members at the close of business on the business day preceding the day on which notice is given or, if notice is waived, at the close of business on the business day preceding the day on which the meeting is held are entitled to notice of a meeting of members. A determination of members entitled to notice of a meeting of members shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. The board may fix, in advance, a date as the record date for the purpose of determining the members entitled to vote at a meeting of members. Such record date shall not be more than sixty (60) days before the date of the meeting. Such record date shall also apply in the case of an adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. If no record date is fixed, members on the day of the meeting who are otherwise eligible to vote are entitled to vote at the meeting of members or, in the case of an adjourned meeting, members on the day of the adjourned meeting who are otherwise eligible to vote are entitled to vote at the adjourned meeting of members.
ARTICLE V: BOARD OF DIRECTORS
A. Powers
The business and affairs of the Cooperative shall be managed under the direction of the board of directors.
B. Number of Directors and Qualifications
The board will consist of no fewer than five (5) and no more than ten (10) directors. All of the directors shall be Maryland residents. Each director shall be a member of the Cooperative. The directors shall be elected by the members at the annual membership meeting.
C. Terms of Office
The term of office of the directors shall be two (2) years. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified. Notwithstanding the foregoing, a person whose membership is terminated shall immediately cease to be a director of the Cooperative.
D. Voting
The vote of a majority of the directors present at a duly called meeting at which a quorum is present is the act of the board.
E. Notice and Place of Board Meetings
A regular or special meeting of the board of directors may be held at any place in or out of the State or by means of remote communication. Notice of board meetings shall be in writing or delivered by electronic transmission and need not state the business to be transacted at or the purpose of any regular or special meeting of the board of directors. Members of the board of directors or a committee of the board may participate in a meeting by means of a conference telephone or other communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means constitutes presence in person at the meeting.
F. Waiver of Notice
Whenever these bylaws require notice of the time, place, or purpose of a meeting of the board of directors or a committee of the board, a person who is entitled to the notice waives notice if (1) the person, before or after the meeting, delivers a written waiver or a waiver by electronic transmission which is filed with the records of the meeting or (2) is present at the meeting.
G. Quorum
A majority of the directors then in office constitutes a quorum of the board for the transaction of business.
H. Action Without a Meeting
Any action required or permitted to be taken at a meeting of the board of directors or of a committee of the board may be taken without a meeting if a unanimous consent which sets forth the action is given in writing or by electronic transmission by each member of the board or committee; and filed in paper or electronic form with the minutes of proceedings of the board or committee. The action by written consent shall have the same force and effect as a unanimous vote of the directors.
I. Board Vacancies
The members may elect a successor to fill a vacancy on the board of directors which results from the removal of a director. A majority of the remaining directors, whether or not sufficient to constitute a quorum, may fill a vacancy on the board of directors which results from any cause except an increase in the number of directors; and a majority of the entire board of directors may fill a vacancy which results from an increase in the number of directors. A director elected by the board of directors to fill a vacancy serves until the next annual meeting of members and until his or her successor is elected and qualifies. A director elected by the members to fill a vacancy which results from the removal of a director serves for the balance of the term of the removed director.
J. Resignation
Any director may resign effective upon giving written notice to the president, the secretary, or the board of directors of the Cooperative.
K. Removal
Any or all Directors may be removed without cause if the removal is approved by eighty percent (80%) of the members. Any reduction of the authorized number of directors does not remove any director prior to the expiration of the director’s term of office.
ARTICLE VI: OFFICERS
A. Offices
The Cooperative shall have a president, a vice president, a secretary, and a treasurer. The offices of secretary and treasurer may be combined. A person may hold more than one office but may not serve concurrently as both president and vice president. A person who holds more than one office may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer.
B. Qualifications
The officers shall be elected from among the board.
C. Appointment of Officers
The officers shall be elected by the board for one year terms. Officers may be removed by a vote of the board.
D. Resignation
Any officer may resign at any time upon written notice to the Cooperative.
E. Vacancy
A vacancy in any office resulting from an officer’s death, resignation, removal, or disqualification, or from any other cause, will be filled by the board.
F. Duties of President
The president shall preside at board and membership meetings and will exercise and perform such other powers and duties as may be assigned from time to time by the board of directors.
G. Duties of Vice President
The vice president shall fulfill the duties of the president when the president is not available.
H. Duties of Secretary
The secretary will keep, or cause to be kept, at the principal executive office or such other place as designated by the board of directors, a book of minutes of all meetings and actions of the members and the board of directors. The secretary will keep, or cause to be kept, at the principal executive office, the records of the Cooperative required to be kept by law. The secretary will give notice, or cause notice to be given, of all meetings for which notice is required by statute or by the bylaws. The secretary will have such other powers and perform other duties as prescribed by the board of directors or by the bylaws.
I. Duties of Treasurer
The treasurer will keep, or cause to be kept, adequate and correct books and records of accounts of the properties and business transactions of the Cooperative, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The chief financial officer will have other powers and perform other duties as prescribed by the board of directors or the bylaws.
ARTICLE VII: ALLOCATIONS AND DISTRIBUTIONS
A. Fiscal Year
The fiscal year of the Cooperative shall end on the last day of December of each year.
B. Allocations
At least annually, the directors of the Cooperative shall apportion the net savings of the Cooperative in the following order: (1) An adequate portion of the net savings may be placed in a reserve fund; (2) A return on membership capital may be paid; (3) The remainder may be (a) allocated as savings return to members in proportion to their individual patronage; (b) allocated to individual members’ equity accounts; (c) accumulated in the Cooperative’s general fund as unallocated member equity; or (d) distributed in some proportion of subparagraphs (a), (b), and (c) of this paragraph. The Cooperative may also use net savings in a manner calculated to lower the fees charged for goods, facilities, or services or otherwise to further the common benefit of the members. The Cooperative may adopt a system by which the payment of net savings, which would otherwise be distributed, is deferred for a fixed period of time, or a system by which the net savings distributed are partly in cash, membership capital, debt instruments, goods, or services.
C. Member’s Covenant to Declare Income for Tax Purposes
Each member shall take into account on his or her income tax return the amount of any distributions, with respect to the member’s Patronage which are made in qualified written notices of allocation (as defined in 26 U.S.C. Section 1388) at their stated dollar amounts in the manner provided in 26 U.S.C. Section 1385(a) in the taxable year in which such written notices of allocation are received by the member.
D. Payment Rights Regarding Member Accounts
When a member’s membership in the Cooperative is terminated for any reason, the amount, if any, in her or his equity account will automatically be redeemed in exchange for debt. The Cooperative shall repay the debt within five years of the membership termination, with interest accruing at the discount rate – as set by the Federal Reserve Bank of New York – plus two percent (2%), on the amount outstanding at the end of each fiscal year. Notwithstanding the foregoing, the Cooperative shall not be required to pay or accrue any interest prior to September 1, 2011.
ARTICLE VIII: CHECKS AND CONTRACTS
A. Authorized Signatories for Checks
All checks, drafts, other orders for payment of money, notes, or other evidences of indebtedness issued in the name of or payable to the Cooperative will be signed or endorsed by the treasurer or other person or persons in the manner authorized from time to time by resolution of the board of directors.
B. Executing Corporate Contracts and Instruments
The board of directors by resolution may authorize any officer, officers, agent, or agents to enter into any contract or to execute any instrument in the name of and on behalf of the Cooperative. This authority may be general or it may be confined to one or more specific matters. No officer, agent, employee, or other person purporting to act on behalf of the Cooperative will have any power or authority to bind the Cooperative in any way, to pledge the Cooperative’s credit, or to render the Cooperative liable for any purpose or in any amount, unless that person was acting with authority granted by the board of directors as provided in these bylaws, or unless an unauthorized act was later ratified by the Cooperative.
ARTICLE IX: RECORDS
A. Records Required to Be Kept
The original or a certified copy of the bylaws, including any amendments to them, shall be kept at the Cooperative’s principal office. The Cooperative shall keep correct and complete:
- Books and records of its accounts and transactions; and
- Minutes of the proceedings of its members and board of directors and of any executive or other committee when exercising any of the powers of the board of directors.
B. Annual Report
The Cooperative shall prepare within 120 days of the close of its operations for each fiscal year a report of its conditions which shall be available for inspection by the members of the Cooperative. The report shall state, at a minimum:
- The names, addresses, occupations, and date of expiration of the terms of the directors and officers;
- The amount and nature of the Cooperative’s authorized, subscribed, and paid-in capital and the rate at which any return upon capital has been paid
- The total number of members and the amount of membership equity received or allocated;
- The annual receipts, annual expenditures, assets, and liabilities of the Cooperative; and
- The audit committee report or the report of the auditors.
A copy of this annual report shall be kept on file at the principal office of the Cooperative and be made available to the members during regular business hours.
C. Audit
The Cooperative shall have an audit committee. At least annually, the audit committee shall audit, or cause to have audited, the affairs of the Cooperative and make a full report on the audit to the board of directors and the annual membership meeting. A report for the previous fiscal year shall be read or presented in written form at the annual meeting of members of the Cooperative and kept with the records of the Cooperative.
ARTICLE X: BYLAW AMENDMENT
Bylaws may be adopted and amended only by the members, unless the members adopt a bylaw which permits the board of directors to adopt and amend specific bylaws. Any bylaw adopted or amended by the board of directors shall be reported at the next regular membership meeting. Bylaws shall be adopted, amended, or repealed by at least a majority vote of the members voting.